UPDATE 1-RSA considers sale of Latin-American unit - source

LONDON, March 17 (Reuters) - British general insurer RSA
is weighing a possible sale of its Latin American
business, a source familiar with the matter said on Tuesday, in
what would be the group's biggest in a long-running series of
disposals.

That followed media reports on Monday that the general
insurer was considering a sale of the operations, which are
spread across Argentina, Chile, Brazil, Mexico, Colombia and
Uruguay. RSA declined to comment.

RSA has been retreating from secondary markets to help shore
up its balance sheet and refocus its strategy after an
accounting scandal at its Irish unit fuelled a series of profit
warnings and bumper cash call.

At its most recent results, the company said it still
considered itself to have leadership positions in parts of Latin
America as well as Scandinavia, the UK and Ireland, and Canada.

While it has shed a number of assets, including a minority
stake in its Indian joint venture and operations in China, they
were all much smaller than its Latin American operations, which
are valued at 500-650 million pounds ($740-$960 million).

Ben Cohen, analyst at Canaccord Genuity said, strategically,
a sale would leave RSA with a reliance on very mature markets,
"which is not a problem as long as you do it well" he said,
citing the example of Direct Line.

Cohen said the deal would likely be at a healthy premium to
its book value and the best scenario would be if cash was
returned to shareholders, although the firm had not flagged any
impending windfall and proceeds could be used to build RSA's
capital position, which came out weaker than expected at
results.

Shares in RSA were a marginal outperformer in a flat FTSE
100, which Cohen said suggested there was some
expectation in the market that the business could be put on the
block.
(Reporting by Simon Jessop; Editing by Sinead Cruise and Keith
Weir)